The Poor See Benefits Cut in a Push for Jobs

After Beverly Boatwright separated from her boyfriend three years ago, she was unemployed and had a son from the relationship. Receiving no support from the baby’s father, she and her son lived on food stamps from the New York Human Resources Administration (HRA) for more than a year.

The food stamp program “really helps when you are trying to find a job,” said Boatwright, 26, during a break, after hours standing in central Harlem, introducing passers-by to wireless services.

“They took me off for a while,” she said. “Then after several months they put me back. I had to redo everything all over.”

Her removal from the benefit program, she said, may have been intended to make her find a job. While Boatwright was seeking a job, she sent her son to a childcare center free, and he had health care coverage under Medicaid.

To her surprise, after she went to work, her son’s social benefits increased. Apart from the childcare and health care services, her son, now 3, receives up to $100 a month in cash from the HRA. It is not a large sum, but Boatwright said it’s good enough for her.

Boatwright is one of more than 2.5 million single parents who have seen their own and their children’s benefits drop when they fell out of the labor market and increase when they found jobs.

The United States is spending more money on social welfare than ever, but the poorest and the unemployed have been seeing the benefits move to better-off families.

Over the past 30 years, benefit distribution has changed, with more going to disabled and elderly people, and families of married couples. Meanwhile, single-parent families and the poorest have been receiving less than they used to, in inflation-adjusted terms, said Robert Moffitt, professor of economics at John Hopkins University.

The change — a result of new social welfare and income tax laws — may prompt more poor people, particularly those unemployed, to work. On the other hand, it risks leaving the poorest even further behind and widens the earning gap in the American society, which now leads the developed world in terms of income inequality.

“Congress prefers to give government funds and support to the families that it thinks are more deserving,” said Moffitt, adding that “deserving” people include those who work, are married and have children.

“Unfortunately, it can exacerbate the worse of the inequality problem,” he said.

In the past 30 years, safety net benefits have shifted as a result of the Supplemental Security Income program, which helps the elderly and disabled; the Earned Income Tax Credit program, which offers tax credits to working people and mainly to families earning between $10,000 and $20,000; and the Child Tax Credit.

People earning the least, just 50 percent of the federal poverty line, are receiving less government support than those with income at twice the poverty line, Moffitt said in his paper “The Deserving Poor, the Family, and the U.S. Welfare System.” That means a family of four earning $11,900 a year gets less than a same-sized family earning $47,700, the research found. Similarly, financial support for single-parent families with the lowest earnings decreased 35 percent from 1983 to 2004.

The poor families, like Debbie Jackson’s, already feel the heat. The mother of two girls, 13 and 16, Jackson struggles to make ends meet. She receives food stamps worth $230 a month.

“It’s not enough,” she said while walking out a food stamp registration office on 125th Street.
“It’s better than nothing, but it should be more for the kids at that age. They consume so much.”

The shift in welfare distribution derives from Congress’s perception that those who do not work have not taken responsibility for their own lives, according to Moffitt.

The public generally supports that perception of unemployed people, particularly single mothers, as irresponsible. Without a reduction in benefits, many young women who are out of work may keep having babies, as the more children they have, the more money they get, said Michelle Madoo, a medical technician in Mott Haven.

“You have to work for your child,” she said. “You have to get up and do your homework. It’s not fair for people to pay tax for them.”

Madoo, 53, lost her job half a year ago because of a disease in her right heel, which prevented her from standing in the operating room. Since then, she has received support from the HRA to pay her rent. After recovering from surgery, she has been trying hard to find a part-time job.

“You can get some support to get over your hardships,” she said. “It’s not to live off those benefits.”

Many economists support her view. Peter Mueser, professor of economics at the University of Missouri, said the change in benefit distribution aims to encourage people to work.

A very generous program damages the economy, as it causes people to remain unemployed, while a less generous one creates incentives to work, he said.

“It will make those families poorer,” he said. “And when people are poorer, they tend to work more.”

However, for liberal economists like Catherine Ruetschlin at Demos, a New York-based public policy organization, there are problems with that perception. Poor people rely on benefits not because they don’t want to work, she said, but because they can’t get jobs that provide enough working hours or wages to meet their basic needs.

“The idea that people are disincentivized from making a living by the availability of the benefits, in fact, has proven complementary to support low-wage employers,” she said. “The presence of millions of working poor is evidence that incentive doesn’t really characterize the American workforce.”

For Boatwright, who finally found a job, it is a happy ending after months of living on social benefits. She has started to save for her son’s education.

“I want to send him to a private school,” she said. “He’s very smart.”

She said her son now has a good life, even without the support from his father, who might soon be chased by the social welfare office for his child support duties. She does not plan to have more children so she can ensure her son’s education.